Cano Petroleum Acquires Square One Energy
|Monday, February 07, 2005
Cano Petroleum has signed a letter of intent to acquire Square One Energy, a Texas-based oil and gas operating company.
Square One Energy's assets include a 100% working interest in 11,000 acres of mature oil fields in central Texas with current net production of 70 barrels of oil per day from 34 wells. The field had approximately 100 million barrels of original oil in place and, to date, has only produced approximately 17 million barrels of oil in primary production. Cano is optimistic that waterflooding and Alkaline-Surfactant-Polymer technology will be viable enhanced recovery methods on this property.
The deal would also include other tangible assets such as a gas processing plant, production equipment, a field office and an office building.
"The acquisition of Square One Energy represents an excellent opportunity to expand our land portfolio into our home state of Texas," said Jeff Johnson, Chairman and CEO of Cano Petroleum. "With this deal, Cano would be the beneficiary of substantial existing infrastructure investments, resulting in significant cost savings as we move forward with future drilling and field development."
Cano expects the acquisition to close within 60 days. The acquisition will be financed with cash and stock. Specific terms of the transaction are not being disclosed at this time.